At what point it makes a financial sense to sue an IP thief?

3 pointsxstartup8y ago1 comments

Let's say if an employee starts an LLC and pretends to be the owner of the stolen software product (stolen proprietary source code, but few changes).

The LLC is registered in Delaware and the employee himself lives in NYC where he bought lots of real estate with sales proceeds from stolen code.

I understand you can sue anyone anytime. But it doesn't mean, you'll win or it will be worth it.

Taking completely financial aspect (no hate/hard feelings/ego stroking).

If this employee sells $100 worth of stolen software, then it's not worth suing him or is it? As the damage is not even enough to cover legal costs.

So, at what damage level does it make sense to sue this person? Can we only sue for the actual theft amount (amount invoiced out of his new LLC) or we can sue for an amount exceeding the actual theft?

At what level of theft it makes a financial sense to sue this person, taking into consideration only the legal fees, not our personal time?

1 comments

1 comments · 1 top-level

mchannon8y ago

Much as I hate them, this sounds like material for a civil-criminal hybrid case.

Looks like you were defrauded out of your source code and proceeds therefrom. If so, work on putting together a fraud/theft complaint and contact law enforcement. They have threshold amounts, so if it's over, say, $100k in losses, you'll interest them far more than if it's only $100 in losses. Don't lie, but don't understate, or assume you can't add up all the categories of loss into a larger number.

A successful criminal prosecution may entitle you to recovery of restitution from the thief, with the litigation paid for nearly entirely by the government. As a bonus, you (through the government) get to threaten the other party with prison time, and they can neither discharge what they owe you in bankruptcy nor hide their money from a judgment near as easily.

With this option on the table, seems rather foolish to even consider a civil lawsuit. Lawyers cost money, but criminal complaints are free.

Now if only our system kept situations like these from happening where the victim lies to the government.